Managing BIR Audit Risks and Assessments
On September 22, 2026, Atty. Euney Marie J. Mata-Perez delivered a talk entitled “Managing BIR Audit Risks and Assessments” at the Zobel Dining Room, Makati Sports Club. The discussion provided practical guidance on navigating Bureau of Internal Revenue (“BIR”) audits, from tax compliance and audit preparation to responding to assessments and pursuing available remedies.
Atty. Euney began by discussing the power of taxation and the authority of the Commissioner of Internal Revenue to enforce and administer the Tax Code. She also addressed the realities taxpayers may encounter during a BIR audit, including unreasonable audit findings, the significant costs of litigation, and the risk of corruption.
Against these realities, Atty. Euney emphasized that taxpayers should be both tax compliant and audit-ready. Compliance requires taxpayers to observe applicable tax laws and BIR regulations and maintain adequate records to support their tax positions. She also underscored that the costs of non-compliance can extend beyond deficiency taxes to include penalties, interest, compromise amounts, and litigation expenses.
For taxpayers undergoing an audit, understanding the issues is essential. Atty. Euney stressed the need to identify the factual and legal bases of audit findings, address them strategically, and understand the remedies available at each stage of the assessment process.
The discussion also covered the BIR audit process and the substantive and procedural requirements that must be observed for an assessment to be valid. While the BIR is vested with broad powers to examine taxpayers and assess taxes, such powers must be exercised within the bounds of the law. Taxpayers should therefore examine not only the substance of an assessment but also whether the BIR complied with the applicable legal and procedural requirements.
Finally, Atty. Euney highlighted the importance of having a strong legal and tax team to help taxpayers remain compliant, prepare for audits, assess potential exposures, and respond appropriately to assessments. She likewise emphasized the importance of protecting one’s reputation as a taxpayer and, above all, never giving in to corruption.
The overarching message was clear: effective BIR audit risk management begins long before an assessment is issued. Taxpayers should remain compliant, understand their rights and obligations, address issues strategically, and uphold integrity throughout the audit process.